A Partner's Self-Employment Earnings (Loss)may Be Affected by Her Share

question 85

Multiple Choice

A partner's self-employment earnings (loss) may be affected by her share of ordinary business income (loss) and any guaranteed payments she receives. The impact of these amounts typically depends on the status of the partner. Which of the following statements correctly describes the effect these items have on the partner's self-employment earnings (loss) ?

• A)General partner-only guaranteed payments affect self-employment earnings (loss)
• B)General partner-ordinary business income (loss)and guaranteed payments affect self-employment earnings (loss)
• C)Limited partner-only guaranteed payments affect self-employment earnings (loss)
• D)Limited partner-only ordinary business income (loss)affects self-employment income (loss)
• E)Both general partner-ordinary business income (loss)and guaranteed payments affect self-employment earnings (loss)and limited partner-only guaranteed payments affect self-employment earnings (loss)

---

Definitions:

Integral Approach

An accounting method that combines the financial statements of a parent company and its subsidiaries into one comprehensive set of statements.

Pre-tax Interim Net Income

The net income earned before taxes are deducted during an interim period, such as a quarter or half-year.

Income Tax Loss

A situation where tax-deductible expenses exceed taxable revenues, potentially reducing taxable income in future periods through loss carryforwards.

Tax Loss Carryforward

A tax provision that allows a company to use its current loss towards future profits to reduce taxable income.